Government employees’ pensions to increase by 5.5%

PENSIONERS and beneficiaries who are members of the Government Employees Pension Fund (GEPF) are set to receive an annual pension increase of 5.5% from April 1.

The increase was granted to enable them to keep up with inflation, said GEPF principal executive officer Abel Sithole in a statement.

Sithole explained that inflation, over one year until last November, had been 4.6%, making the increase higher than inflation and higher than the 75% of Consumer Price Index provided in terms of Government Employees Pension Law of 1996, as amended, and the rules that accompany it (GEP Law).

According to him, an analysis of the assets held by the fund, in relation to the valuation of its liabilities undertaken in 2016, showed that the fund is 115.8% funded, meaning there were sufficient assets in the fund to cover its actuarial liabilities in full.

“However, increases above those provided for in GEP Law and rules are granted at the discretion of the board, taking the fund’s investment performance into account,” said Sithole.

According to him, the GEPF was governed by GEP Law, and the rules that accompany it.

Those rules gave firm guidelines on how the fund should decide the annual increase paid to pensioners, he said.

“This minimum funding level states that the fund’s assets must be able to cover at least 90% of its liabilities.

“This means that what the fund owns (its assets) must be able to cover the cost of at least 90% of what it owes in terms of the current and future pension payments that it is committed to pay (its liabilities).

“According to the rules, the fund may thus only approve an increase that it can afford,” said Sithole.